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If you’re the CFO of a company being acquired, chances are your salary—and the salaries of your staff—are among the savings promised to shareholders in the wake of the deal.

But that doesn’t mean you can put your feet up on the desk and wait for a pink slip. Far from it. In many cases, the target-company finance chief must juggle his or her normal chores with the extra duties created by the acquisition, including management of a demoralized workforce, and helping staffers plan for when their period of redundancy ends. Finance executives who have been in this position describe it as a combination of cheerleader, spy, ultimate company man, and rugged individualist on the lookout for the next job.

“Sleep is not a priority during an acquisition,” says Rick Allen, who was CFO and executive vice president of finance and administration for J.D. Edwards before PeopleSoft acquired it in the summer of 2003.

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Perhaps the worst aspect of the acquisition drama is the need for subterfuge. “I had to mislead my staff about what was going on before the deal was announced,” says Steve Wasserman, the 47-year-old former CFO of ON Technology Corp., a Waltham, Massachusetts-based software company whose acquisition by Symantec Corp. was completed in February. “I didn’t feel good about that.”

The constraints were tough on the 46-year-old Allen, as well. While top executives realize early on which people will be laid off, Securities and Exchange Commission rules prohibit discussion about such details with anyone who hasn’t been granted special insider status for the purpose of the deal. When talks between J.D. Edwards and PeopleSoft started in October 2002, Allen and his due-diligence team had to keep all acquisition-related information—including the fact that there might be a deal—under wraps until the transaction was announced in June. He guessed that the finance team would be heavily impacted. “You can’t have two SEC compliance groups and two legal teams” when the combination is completed, he says.

Allen put his discomfort aside, and asked many of his direct reports to do the same. Due diligence started in earnest at the company in mid-May 2003, and Allen was responsible for choosing who to “bring over the wall” and allow to hear details of the planning. “We [had to] explain to them that they were insiders now to the highest degree,” he recalls, but that their excluded co-workers—finance and nonfinance—were not.

To complicate matters, at the time the staffers were brought over the wall, “they also had to work hard on the due-diligence team, close the books, and get ready to announce the quarter,” says Allen. He was, he says, “blessed with having high-caliber, hardworking, and ethical people” on his staff. “They really dug in.”

At ON Technology, reports Wasserman, “when things got hot and heavy on the deal, we had people pulling contracts, making copies. Everyone wanted to know what was going on, and we couldn’t tell them.”

The Battle for Productivity

Once the deal has been announced, morale deteriorates. When suspicions are confirmed and layoffs are announced, staff productivity can head south. While CFOs usually have strong financial incentives to keep working hard, other staffers may not.

Wasserman, who had a large number of stock options and a retention bonus, praised his team’s hard work in pulling the deal together, but was also honest in his appraisal of productivity once the deal had been announced. (Employees received stock options as part of the standard employment contract, and vesting was accelerated due to the acquisition, while those scheduled for layoffs received retention bonuses to stay and help with the transition.) “Were they as productive as they would have been if Symantec hadn’t made the offer? Probably not,” he says. “Were they productive enough? Absolutely. The wheels did not fall off.”

At ON Technology, most of the job losses from the merger came from departments that reported to Wasserman. Laid-off J.D. Edwards employees received a “fair” severance package from PeopleSoft, says Allen, who won’t comment further on that aspect of the acquisition. (Allen says he received a severance package commensurate with his role as executive vice president and a decade-long tenure with the company.)

Allen was pleased with the J.D. Edwards employees’ hard work during the acquisition. “They put their heads down and got the deal done,” he says. “They knew it would be a good strategic decision for us and for our customers. I didn’t have to spend a lot of time convincing them to work hard.” In all, about 750 J.D. Edwards employees lost their jobs, about 125 of them in finance. But because PeopleSoft scoured its own ranks for redundancies as well, some high-level J.D. Edwards finance staffers ended up with jobs there.

Let Them Vent

Most employees displaced by a deal receive outplacement assistance and severance packages, but what’s most important to all is communication, says Larraine Segil, a partner at Vantage Partners, consultants on relationship management who worked with Compaq before its merger with Hewlett-Packard. Her advice to CFOs: keep staffers posted on downsizing plans. “When you know who is going to stay and who is going to go, do it fast,” she says. Taking too long puts staffers “in paralysis, and productivity really suffers.”

Wasserman communicated face-to-face with the people who were losing their jobs. “It was about just walking into offices, talking to people, telling them how important it was that we continue to work hard,” he explains. “And you have to let them vent.”

Allen also scheduled multiple meetings with his teams through the process. “The truth never gets any better,” he says. “You have to be honest. If you don’t know something, admit it. What you’re trying to do is drive out fear, uncertainty, and doubt wherever you can.” The truth “may not give people a sense of comfort,” he says, “but it will give them the confidence that they’ll be treated with respect and dignity.”

Allen helped increase his staffers’ confidence by helping them identify job possibilities. “In virtually every case,” he says, “they were offered other opportunities.”

Taking Care of Yourself

For the CFO, retaining a position with the acquiring company is not impossible, but it demands a heavy dose of realism, says Segil. If the acquiring company is twice the size of the acquired one, you won’t be a serious contender for CFO or other key finance posts. If a demotion is involved, make sure your employment contract has a time line for promotion, she says, and of course, get any offer in writing.

Both Allen and Wasserman knew early on that a job hunt lay ahead. But since the acquisition took top priority, neither began actively looking until the deal had closed.

At ON Technology, keeping busy helped keep Wasserman’s mind off the inevitable. But then it came: the Symantec letter announcing his official termination date. “That was the most difficult experience,” he recalls. “It was like, wow, this is ending in a month. I feel proud of my team here and what we’ve accomplished.” Then “the finality of it all just hit me.” Wasserman, who lives in Medway, Massachusetts, is now in the final interview stages for a new CFO job.

Rick Allen is now spending time at home in Denver with his wife and two daughters, and contemplating new opportunities. “There are still mountains to conquer,” he says. “I just want to make sure they’re the right ones.”

Kris Frieswick is a senior writer at CFO.

Dealing Them OutAcquirers and acquired in Allen’s and Wasserman’s lives (sales, earnings, and employees are preacquisition figures).